Ikea Admits Forced Labor Was Used in 1980s

BERLIN — Ikea has long been famous for its inexpensive, some-assembly-required furniture. On Friday the company admitted that political prisoners in the former East Germany provided some of the labor that helped it keep its prices so low.

A report by auditors at Ernst & Young concluded that Ikea, a Swedish company, knowingly benefited from forced labor in the former East Germany to manufacture some of its products in the 1980s. Ikea had commissioned the report in May as a result of accusations that both political and criminal prisoners were involved in making components of Ikea furniture and that some Ikea employees knew about it.

“Even though Ikea Group took steps to secure that prisoners were not used in production, it is now clear that these measures were not effective enough,” the company said in a statement on Friday.

The use of political prisoners as forced labor, even decades ago, is a publicity disaster for a company that with its familiar blue and yellow logo seems at times like a cultural ambassador for Sweden. Inexpensive Ikea furnishings have filled countless student apartments and the homes of millions of young families around the world.

Accusations against Ikea started to appear about a year ago in news media reports in Germany and Sweden. Ikea’s admission has given new impetus to efforts by victims’ groups to receive compensation for work they were forced to perform under the Communist government in East Germany, an issue that has long been overshadowed here by the large and deadly slave-labor program under the Nazis.

“There’s little recognition,” said Hugo Diederich, the chairman of the Association of Victims of Stalinism, himself a former forced laborer, after a news conference here a short walk from the former Checkpoint Charlie border crossing, in a building that stands along the path of the Berlin Wall.

Ikea is not the only company that has been linked to forced labor in the former East Germany by purchasing goods from suppliers there, though the actual number may never be known.

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An Ikea store in Berlin.Credit
Markus Schreiber/Associated Press

Mr. Diederich said that after an attempt to escape from East Germany, he was forced to make steel pipes for the firms Klöckner & Company and Mannesmann.

At least two well-known mail-order companies in the former West Germany, Neckermann and Quelle, which have since run into financial trouble, have also been accused of using forced labor.

Christian Sachse, a Berlin historian, said forced labor permeated institutions across East Germany, and that it would take “years of research to properly understand the field.”

Mr. Diederich said that more needs to be done for the victims, many of whom today live under worse circumstances than their former tormentors. “This will raise the pressure enormously on politicians to act,” he added.

Ikea’s announcement received a mixed response. There was praise that the company had made an effort to uncover unpleasant facts about its past, but also criticism that it had not been transparent enough with the results. Rather than releasing the entire report, the company made only a four-page summary available, citing privacy concerns.

But Steffen Alisch, a researcher on prisons in the former East Germany at the Free University in Berlin, said, “They have to make the entire report available, and they have to do it quickly.”

The fact that Ikea retained Ernst & Young for the inquiry instead of using independent academic experts also raised questions. “Ernst & Young has no experience with research into dictatorships and is clearly not objective,” said Ronald Lässig, chairman of the East German victims’ group DDR-Opfer-Hilfe. “What Ikea did today was little more than an event for show.”

Investigators examined 20,000 pages of internal Ikea records, as well as 80,000 pages of documents from federal and state archives. They interviewed about 90 people, including current and former Ikea workers and witnesses from East Germany.

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Former East German prisoners attended a news conference on Friday at which Ikea confirmed forced labor was used to make products in the 1980s.Credit
Thomas Peter/Reuters

A political prisoner in Naumburg, about an hour’s drive from Leipzig, told investigators that he was sent to VEB Metallwaren Naumburg, one of East Germany’s state-owned enterprises. He was put to work placing metal pegs in chair legs and furniture rollers, and remembered seeing boxes with the Ikea logo.

A purchaser for the company said that “the use of prison labor was not an official Ikea strategy, but that there was an awareness within the company about the issue.”

“The G.D.R. did not differentiate between political and criminal prisoners,” Ernst & Young wrote, referring to East Germany, adding that “during this time period, many innocent individuals were sent to prison.” Ikea repeatedly raised concerns about the possible use of forced labor at the time but no action was taken, the report said.

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Jochen Staadt, a professor at the Free University of Berlin, said it was well known at the time that East Germany was using prisoners to work in factories but that West Germany encouraged the production of goods in the East because it allowed the East to reduce its debt. At the same time, companies liked to move production to East Germany because costs were lower.

Professor Staadt said companies like Ikea would still have paid for the work in East Germany but that the pay never reached the workers. “It was pocketed by the G.D.R.,” he said.

Ikea employees did visit the production sites in East Germany, but rules governing such visits were strict, that way reducing the effectiveness of site inspections. Any visit had to be registered and approved in advance and could take place only in selected parts of the plants, and a representative of the East German government had to be there.

Ikea said Friday it was sorry about the episodes and pledged to donate money to research on forced labor in the former East Germany.

“We deeply regret that this could happen,” Jeanette Skjelmose, sustainability manager at Ikea, said in a statement.

Rainer Wagner, chairman of the victims’ group UOKG, said at the news conference here that “a broad public clarification” was necessary, not just from Ikea but from “all the firms” that used forced labor. But Mr. Wagner also thanked Ikea for its “pioneering role” in helping to bring greater public attention to the subject.

A version of this article appears in print on November 17, 2012, on Page A8 of the New York edition with the headline: Ikea Admits It Benefited From Forced Labor in ’80s. Order Reprints|Today's Paper|Subscribe